10 LC 18
8609
House
Bill 946
By:
Representatives Everson of the
106th,
Lunsford of the
110th,
Hamilton of the
23rd,
and Davis of the
109th
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Code Section 48-7-27 of the Official Code of Georgia Annotated, relating
to computation of Georgia taxable net income of an individual taxpayer, so as to
provide for an exclusion with respect to certified new business income; to
provide for definitions, procedures, conditions, and limitations; to provide an
effective date; to provide for applicability; to repeal conflicting laws; and
for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Code
Section 48-7-27 of the Official Code of Georgia Annotated, relating to
computation of Georgia taxable net income of an individual taxpayer, is amended
by adding a new subsection to read as follows:
"(e)(1)
As used in this subsection, the term:
(A)
'Certified new business' means a new business:
(i)
For which the taxpayer has applied for and received from the Internal Revenue
Service a new taxpayer identification number; and
(ii)
For which the taxpayer has completed an application affidavit approved by the
department certifying:
(I)
Any and all businesses in which the taxpayer has any ownership interest as of
the date of such application;
(II)
That the new business is not a continuation, rebranding, or reorganization of an
existing business; and
(III)
That the taxpayer actually works in and is not merely a passive owner of such
new business.
(B)
'Taxpayer' means an individual, sole proprietorship, partnership, S corporation,
limited liability company, or limited liability partnership, except as otherwise
provided in this subsection.
(2)
Subject to the conditions and limitations specified in this subsection, a
taxpayer may exclude an amount not to exceed $50,000.00 from such taxpayer's
Georgia taxable net income from such certified new business during the first two
taxable years of bona fide operations of one or more certified new
businesses.
(3)
The exclusion amount specified in paragraph (2) of this subsection shall be
cumulative regardless of the number of certified new businesses.
(4)
If a taxpayer is married, each spouse shall be authorized to calculate the
exclusion amount separately so that taxpayers who are married filing jointly may
exclude an amount not to exceed $100,000.00 from their Georgia taxable net
income during the first two taxable years of bona fide operations of one or more
certified new businesses.
(5)
A taxpayer shall not qualify for the exclusion under this subsection unless such
taxpayer is a least 18 years of age or older in the year for which the exclusion
is claimed.
(6)
A taxpayer shall not qualify for the exclusion under this subsection if such
taxpayer is claimed as a dependant on another taxpayer's income tax return in
the year for which the exclusion is claimed.
(7)
If otherwise qualified under this subsection, there shall be no limit on the
number of business owners of a certified new business who are eligible for the
exclusion under this subsection.
(8)
In the case of a C corporation, a taxpayer who is otherwise qualified under this
subsection may claim the exclusion authorized under this subsection for
dividends declared by such C corporation and paid to such taxpayer.
(9)
The exclusion amount shall be authorized only for taxpayers who start certified
new businesses. An individual or group of owners who purchase a certified new
business shall not be authorized to claim and receive the exclusion for that
certified new business.
(10)
Any deductible losses from any certified new business shall be netted against
any W-2 compensation paid to the taxpayer from any certified new business and
any income from any other certified new business such that the combined W-2
compensation and net income from all certified new businesses of the taxpayer
shall be combined in order to determine the exclusion amount under this
subsection.
(11)
For a taxable year in which a certified new business has a loss and there is no
W-2 compensation paid to the taxpayer and no income from any other certified new
businesses, the exclusion amount under this subsection shall be
zero.
(12)
Other Georgia taxable net income adjustments related to a certified new business
W-2 compensation and income, such as one-half of self-employment taxes; SEP,
IRA, or SIMPLE funding; and self-employed health care insurance, shall be netted
against the calculation of exclusion amount under this
subsection."
SECTION
2.
This
Act shall become effective upon its approval by the Governor or upon its
becoming law without such approval and shall be applicable to all taxable years
beginning on or after January 1, 2010.
SECTION
3.
All
laws and parts of laws in conflict with this Act are repealed.